I have shared interest mineral rights in Smith County, Texas. Two of the other owners have already signed a contract. The land in which we have mineral rights has 39 tracts. By them signing, can the remainder of us still counter in negotiations in order to have multiple leases (rather than with the set contract that has already been partially accepted by two of my family members)?
Thank you for any help
Katie,
This is just my opinion,,I'm not an attorney My opinion is that you do not have to accept the same terms as the other mineral owners in the lease that you sign.
Can you share the Abstract # of the minerals in Smith County? And/Or Section #?
Clint Liles
Clint,
A-881, A-1127, A-464, A-708, A-857 (470.836 ac.) NMA = 3.269694444
Katie
Katie,
After checking the area where your minerals are located I see no activity. The nearest production is approximately 1 1/4 miles to the S/SW. Several dry holes have been drilled in the surrounding area in the past years. Dry holes from yester years don't mean much now days with the new technology that's being used. If there was production in the immediate area you would have some bargaining power. Try to 'negotiate' and get the best possible lease. If a well is drilled and there is production the money is in the royalty. Royalty should be between 20 and 25% in today's market. If the oil company is offering $150 to $250 per acre I would say that is reasonable.
GIS Map of Smith County Abstract 881, 1127, 464, 708, and 857:
Katie check your inbox
Clint Liles
Hi Katie!
Although you share ownership in the lands with your family, each of you owns your interests separately.
Your interests are "undivided" because of the common ownership in the same 39 tracts, but you each own your interests separately.
You are completely free to negotiate your own lease.
Hope this helps -
Charles Emery Tooke III
Certified Professional Landman
Fort Worth, Texas
Charles,
Thank you, all the details help greatly, it seems only common sense to me that several leases
would be better for everyone involved.
Katie
Some people have one tract per lease so that if part of their land is included in a Unit with other peoples' land, the rest of their land will be released at the end of the Primary Term. You can accomplish the same thing by adding a Pugh Clause (named after a guy). A Pugh Clause simply states that at the end of the Primary Term any lands that are not included in a Unit are released.
There are several Clauses or Provisions that you can add to your lease(s) to better protect your interests. Do you own the surface or just mineral interests?
With a lease that covers that much land and that many tracts, you should consult an experienced Oil and Gas Attorney before signing anything. Everyone in your family should.
Charles
Charles,
We just own the minerals.
That is, in Texas anyway.
Another situation in Arkansas. But I am just trying to take care of this one right now.
Katie
